Obama’s Defense-Spending Crisis

On February 24, Secretary of Defense Chuck Hagel walked into the Pentagon briefing room to deliver a speech unveiling the defense budget of the United States for the coming fiscal year. Two days later, gunmen without insignia on their uniforms began occupying key positions in Crimea. It was the start of a Russian takeover of the Ukrainian province, a move that has touched off the biggest crisis in Europe since the civil war in the former Yugoslavia in the early 1990s.

The disjunction between those two events is startling—and worrying. The defense budget Hagel has produced is based on the assumption that (as President Obama often says) the “tide of war is receding.” Therefore, in this new era, the United States can afford to slash military manpower levels to focus on longer-term research-and-development projects while relying on a small number of Special Operations Forces and unmanned drone aircraft to protect American interests. Similar assumptions have been made before. They underlay the defense budget cuts of the 1920s, the late 1940s, and the 1990s. In each case, those assumptions were tragically flawed and left the United States unready to face conflicts once they erupted.

But never before has the refutation of the budget-cutting logic occurred within 48 hours of the budget’s unveiling.

Yet even as Russian troops were overseeing the annexation of Crimea, thus raising the risk of a major war in Europe for the first time in decades, the budget-cutting imperative in Washington remained unaffected. Indeed, it is likely that Hagel’s defense budget, which already contains significant cuts, will be slashed even more deeply by Congress.

To understand why this is such a bad idea, it helps to understand the nuts and bolts of the budget blueprint. The “top line”—the total amount of money requested by the Department of Defense for fiscal year 2015 (October 1, 2014, to October 1, 2015)—is $495.6 billion. That’s a lot of money. But it’s $400 million less than the amount appropriated for the current fiscal year, and it’s down from a peak of $705 billion in 2011. That is a decline of nearly 30 percent. The proposed defense budget for 2015 will consume only 3.4 percent of the nation’s Gross Domestic Product—down from 4.7 percent in 2011.

This figure is projected to continue declining to a mere 2.3 percent of GDP by 2024, which would be the lowest level since 1940 (a year that recurs with ominous regularity in the discussion of the current defense budget). And that’s assuming (an unlikely assumption) that Congress shuts off sequestration cuts—automatic spending reductions—which are due to carve another $500 billion out of the defense budget over the next decade. Those will come on top of the $487 billion in cuts already mandated by the Budget Control Act of 2011. If Congress doesn’t turn off sequestration, the amount available for defense will shrink even more.

What do these cuts mean for the individual services?

The Army

The worst hit will be the Army, which has already shrunk from its wartime high of 570,000 active-duty soldiers down to 520,000. The Army leadership had hoped to keep the force at 490,000, but there’s no chance of that now. Under Hagel’s budget—which, in the words of a Pentagon press release, “will no longer size the force for large and prolonged stability operations”—the Army will have to be cut to 440,000 to 450,000 active-duty soldiers. And that is only assuming sequestration is repealed. If it isn’t, the Army will be reduced to 420,000 active-duty soldiers, the smallest number since 1940 (there’s that year again), when the Army had 469,000 soldiers, and America had 200 million fewer inhabitants.

If these measures were to take place, according to the Congressional Research Service’s estimates, the number of active-duty brigade combat teams (BCTs), the basic unit of maneuvering, would fall by nearly half—from 45 in 2013 to 24 by 2019.

The Army Reserves and Army National Guard would suffer smaller but still significant cuts: from 355,000 down to 335,000 soldiers in the Guard, and from 205,000 down to 195,000 soldiers in the Reserves if sequestration is repealed. If it is not repealed, those numbers will shrink by an additional 11 percent: 315,000 in the Guard and 185,000 in the Reserves. The total number of Army National Guard Brigade Combat Teams under sequestration would fall from 28 to 22.

Army leadership has stated that a force of 28 active-duty BCTs and 24 Guard BCTs, which would require an active-duty end-strength of 450,000 personnel, is the “smallest acceptable force to implement the defense strategy” mandated by the nation’s political leadership in documents such as the Quadrennial Defense Review. If the total number of BCTs were to fall beyond that level, the Army would find itself hard-pressed to carry out such basic missions as maintaining two BCTs in Europe—where they serve as a critical check on Russian expansionism. The Army warns: “An Army force structure of 24 [active] and 22 [reserve] BCTs lacks the capacity to conduct simultaneous major combat operations while defending the nation at home, sustaining minimal presence in critical regions, and retaining a Global Response Force (1 BCT) at the direction of the commander-in-chief.”

That a decline in the Army’s size would have such a deleterious impact on its ability to conduct simultaneous operations—in, say, Yemen and on the Korean peninsula, or in Syria and Ukraine—should be no surprise, given the difficulty the Army has had in sustaining its commitment to two “limited regional contingencies” in Iraq and Afghanistan over the past decade, even when it was at a peak strength of 570,000 soldiers. In neither Afghanistan nor Iraq did the Army have enough troops to pacify the land and prevent the emergence of dangerous insurgencies. The Army was able to cobble together a force barely large enough to deal with the spike in violence in Iraq in 2007 and 2008 only by maintaining a minimal footprint in Afghanistan, thus allowing that country to fall deeper into a crisis from which it has never fully recovered. Imagine how much less capable the Army would be if it were 30 percent smaller. It is, of course, possible to regenerate lost strength in the event of a future conflict. But that is a lengthy, laborious process that risks losing the war’s early battles for lack of adequate strength in the beginning.

The Army, moreover, will probably be not only smaller but also less well-trained and -equipped. General Ray Odierno, the Army chief of staff, warned Congress last fall that as a result of sequestration, only two BCTs were fully ready to deploy.“So we have a huge readiness issue between 2014 and 2017 that…frankly will significantly impact our ability to respond in the way we expect to respond,” Odierno told the Senate Armed Services Committee, noting that if undertrained troops were sent into harm’s way, as has happened often in the past, they could face “potentially higher casualties.”

Congress has since passed the Murray-Ryan Bipartisan Budget Act, which does repeal some of the sequestration cuts over the next two years, giving the Pentagon back $9 billion in 2015 and $22.5 billion in 2016 (out of roughly $100 billion in cuts over those two years). But the military in general, and the Army in particular, has still had to take a massive hit, and one that will likely be more painful in the future.

The Marines and the Navy

The other ground force in the U.S. military—the Marine Corps—would not take as drastic a hit, simply because it’s smaller than the Army and thus not an inviting target for budget-cutters. But in percentage terms, it, too, would face a significant loss of capability. The Marine Corps will fall from today’s level of 190,000 (already down from a wartime high of 200,000), reaching an end-strength of 182,000 if sequestration is repealed and 175,000 if it isn’t. That would constitute a total cut of about 12.5 percent. This reduction will limit the Corps’ ability to complement the Army in future ground operations such as Iraq or Afghanistan and to carry out its own missions, which include carrying out amphibious assault missions. The only way the Corps will be able to meet its commitments will be by reducing “dwell time” at home, thereby putting a major strain on Marines and their families and possibly hurting retention.

The Marines’ sister service, the Navy, will also face significant cutbacks that will further hamper Marine capabilities. The budget tentatively calls for maintaining a fleet of 11 aircraft carriers, but unless sequestration is repealed there will be no money available to retrofit the aging USS George Washington in fiscal year 2016 at a cost of $6 billion. If the George Washington goes out of service, the Navy will be down to 10 carriers, even though current requirements call for 12 to 15. The Navy is in effect down to nine already, because the USS Gerald Ford is still under construction and not due to sail until 2016, and one of the existing carriers is in maintenance at all times.

Meanwhile, under the Hagel budget, half of the cruiser fleet (11 ships) will be placed in “reduced operating status.” Purchases of the small and agile Littoral Combat Ship, which can move into shallow waters close to shore, will be reduced from 52 to 32. If sequestration isn’t repealed in 2016, the Navy is likely to lose a total of 10 large-surface combatants (its bigger ships) and to see a two-year delay in procurement of the F-35 Joint Strike Fighter. The F-35 is designed to replace aging F-18 fighters as the mainstay of the strike groups (the planes that take off and land on carriers).

The U.S. Navy is already down to a battle force of 289, of which only 104 are deployed at any one time to cover the entire world. As it happens, that is a slight increase from 2006, when it hit a low of 281 ships, but less than half the size of the 597-ship Navy of 1987 (to say nothing of the 931-ship Navy of 1967). The only year before 2006 in which the Navy had fewer than 285 ships was 1930, at the dawn of the Great Depression, when the fleet had only 139. Current plans call for a slight increase in Navy size, for a total of 309 ships in 2019, but unless sequestration is repealed, this will be impossible to achieve. More likely the Navy will shrink down to 250 to 270 ships. If the Navy were to meet all the existing force requests from combatant commanders, it would need 450 ships.

Defenders of the drawdown argue that it doesn’t make sense to compare today’s fleet with its much less advanced pre–World War II predecessor. There is an element of truth here, but it is also true that technological superiority can only go so far. At some point quantity matters as well as quality: No matter how advanced the ships are, it’s impossible for a shrinking number of them to patrol all the world’s sea lanes and deal with threats, ranging from pirates to the navies of Iran and China. Already the Navy’s shrinking size is limiting its geopolitical impact. As Mackenzie Eaglen, of the American Enterprise Institute, and Bryan McGrath, of Hudson Institute, note:

No American aircraft carrier was in the Mediterranean at the outbreak of the conflict in Libya. Nor was a U.S. carrier in the Mediterranean when our ambassador to Libya and three others were murdered. No American aircraft carrier was in the Mediterranean when Syria stepped over President Obama’s “red line” and attacked its own citizens with chemical weapons. And while international conventions would ordinarily limit a carrier’s presence in the Black Sea, the complete absence of one in the Mediterranean surely helped further embolden Mr. Putin in Ukraine.

Simply to maintain minimal global coverage with today’s Navy requires a herculean effort on the part of overstretched crews. They are having to remain longer at sea and drive their ships harder, making breakdowns of both sailors and their equipment more probable. Some carrier strike groups and amphibious-ready groups are spending less than six months at home port before heading out on their next cruise, which can last eight months or longer. Admiral Jonathan Greenert, the chief of naval operations, warned in 2012 that the current pace is unsustainable: “We can’t run at that rate,” he said.Yet the looming next round of defense cuts mandates that the Navy will either have to ramp up its operational tempo or cease supporting vital mission requirements.

The Air Force

The Air Force, too, is in for hard times. It will be forced to retire its entire fleet of A-10 Warthogs, the best ground-attack aircraft in the inventory and one that has saved countless lives among soldiers and Marines in combat over the decades. The venerable U-2 surveillance aircraft will also be gone, and the growth of unmanned aerial systems, which are designed to replace it, will be slowed. And this is a best-case scenario. If sequestration isn’t repealed, “the Air Force would have to retire 80 more aircraft, including the entire KC-10 tanker fleet and the Global Hawk Block 40 fleet, as well as slow down purchases of the Joint Strike Fighter—resulting in 24 fewer F-35s purchased through fiscal year 2019—and sustain 10 fewer Predator and Reaper 24-hour combat air patrols,” Hagel has said. “The Air Force would also have to take deep cuts to flying hours, which would prevent a return to adequate readiness levels.”

Just as the Army drawdown was announced shortly before the Russian invasion of Crimea, so the Navy/Air Force drawdown was announced only one month before China announced that its defense budget will grow by 12.2 percent next year, with most of that increase undoubtedly coming in the kind of high-tech forces (such as cruise and ballistic missiles, cyberweapons, stealthy submarines, supersonic fighters, and even a new aircraft carrier) designed to make it increasingly difficult for the U.S. Navy to operate in the Western Pacific.

The Obama administration came into office declaring that U.S. military forces would “pivot” from the Middle East, where they were supposedly overcommitted, to deal with growing challenges in the more important Asia-Pacific region, where they were “underweighted.” The administration doesn’t talk much about the “rebalancing” to Asia anymore, and for good cause. Katrina McFarland, Hagel’s assistant secretary of defense for acquisition, reflected the new reality when on March 4 she was quoted by Defense News as saying, “Right now the [Pacific] pivot is being looked at again, because candidly it can’t happen.” McFarland’s candor caused consternation in defense-policy circles. She was forced to issue a “clarification,” claiming that the Pentagon’s “relevance to Asia can and will continue”—whatever that means. Her initial remark was, of course, entirely on target: With this defense budget, the Obama administration is giving up any pretensions to pursuing its vaunted pivot to Asia, and it’s thereby accepting that our naval and air forces are doomed to slip further and further behind those of China. That could have parlous consequences for the stability of this critical region at a time when China is acting in an increasingly assertive fashion to make good its territorial claims against Japan, the Philippines, South Korea, and other neighbors.

Hagel’s Fantasy

If my assumptions sound alarming, the truth is that they are actually on the optimistic side. Not only will the budget be cut even further barring a repeal of sequestration, but there are other optimistic assumptions built into the Hagel budget that are unlikely to be fulfilled. For one thing, Hagel is asking for another round of domestic military-base closings, a form of cost savings Congress has blocked in the past two years. Although the services currently have excess base capacity, drawing down to a more rational number of bases will be exceedingly difficult because of congressional pressure to keep open installations in members’ districts.

Hagel is also asking Congress to curb the growth of military pay and benefits, which have risen 40 percent faster than pay and benefits in the private sector since 2001. The changes suggested in the Hagel budget are truly quite mild. They include holding the pay increase for military personnel in 2015 to 1 percent above current levels (generals and admirals will see no increase at all), cutting back but not eliminating the subsidy to military commissaries (cut-rate supermarkets that serve service members and their families), slightly reducing the housing allowance, and marginally raising deductibles and co-pays in the military health-insurance program. Actually much more needs to be done, because health-care costs are rising so fast in the defense budget (by an average rate of 6.3 percent over the past decade) that they now total more than $52 billion a year (or more than 10 percent of the entire defense budget), leaving less and less left over for actual war-fighting. The challenge is to curb the growth of spending on pay and benefits while maintaining the benefits that existing service members were promised and not breaking faith with those who have put their lives on the line to defend our freedom. Hagel is not even trying to tackle the bulk of the problem now; he is waiting to do so until the blue-ribbon Military Compensation and Retirement Commission issues its report in February 2015. But getting Congress to slow down the growth of military and veteran health benefits in the wake of Iraq and Afghanistan is probably nothing more than a fantasy.

Finally, Hagel’s budget relies on one last bit of wishful thinking: It includes a call for an extra $26 billion for an Opportunity, Growth and Security Initiative intended to repair readiness problems caused by sequestration. But even Pentagon officials acknowledge that getting congressional approval for that extra spending is a “long shot.” If the money fails to materialize, the Defense Department will not have the funds to build 54 planned helicopters, 20 fixed-wing aircraft, and 12 Predator drones—or to undertake $1.8 billion’s worth of Army training and $2.3 billion to repair and modernize antiquated Navy facilities.

The Ostriches Object

Despite all this evidence of the destructive impact of budget cuts, many remain sanguine about their effects. Lawrence Korb, of the Center for American Progress, for example, said that the 2015 budget “responsibly meets the challenges that our country currently faces, rather than those from a bygone era.” Gordon Adams, of American University, hailed the Army cuts as “good news” that “seem to be based in reality.”The New York Times editorial board called the cuts “necessary” and “prudent” because “the United States cannot afford the larger force indefinitely, and it doesn’t need it.”

Start with the argument that defense spending is unaffordable. It’s true that the federal government faces a fiscal crisis. But the deficit is so large (estimated to be $646.8 billion this year) that you could eliminate the entire Department of Defense and still not erase the deficit. The problem clearly lies with entitlement spending—not with a defense budget, which will consume less than 13 percent of a $3.9 trillion federal budget in 2015. As the political scientist William Galston, a centrist Democrat, notes:

In the decade between 2014 and 2024, if the president’s budget became law, spending for defense and nondefense “discretionary” programs—the outlays subject to annual appropriations—would barely budge. By contrast, Social Security spending would rise by $644 billion, Medicare by $350 billion, and Medicaid by $243 billion. During that same period, interest on the government’s debt would nearly quadruple to $812 billion, from $223 billion, becoming the third-largest line item in the budget. Corrected for inflation, the differences are even more dramatic. While discretionary spending would fall by more than 20%, Social Security, Medicare, and Medicaid would increase by more than 20%, and debt payments would nearly triple.

Given the ever-smaller share of GDP and of the federal budget consumed by defense—both proportions are far below the levels sustained during more than 40 years of Cold War—it is obvious that there is nothing unaffordable about maintaining a military strong enough to carry out the nation’s commitments.

But, skeptics reply, isn’t the U.S. military already far larger than any potential competitor? It’s true that, according to the Stockholm Peace Research Institute, America alone accounts for almost one-third of global-defense spending,more than the next 10 countries combined. But the U.S. armed forces also have more missions to carry out than the next 10 armed forces combined. The U.S. military is the only true global force in the world today. It is expected to maintain the peace in Europe, the Middle East, and the Asia-Pacific region, to respond to grave humanitarian or security emergencies in other parts of the world, and to deal with transnational threats such as terrorism, nuclear proliferation, weapons-trafficking, and cyber attacks. Every other military in the world is regional in orientation. China, Russia, and Iran, to take but three prominent examples, are trying only to dominate their local area—they are not sending expeditionary forces around the world as the U.S. has done routinely since World War II. The U.S. military has to counter China, Russia, and Iran, among others, in their own backyards, while also dealing with a multitude of other threats, such as al-Qaeda. Put another way, our military routinely has to maintain dominance of all the seas, space, and cyberspace, while maintaining the selective ability to dominate the air and ground on any chosen battlefield.

That costs money.

Yet for all the budget-cutting going on in Washington, there has been no diminution of the missions assigned to the armed forces. They are still expected to carry out all their traditional peacetime responsibilities while being prepared for unforeseen missions, such as those precipitated by the bombing of Libya in 2011 and by the disaster of typhoon Haiyan in the Phillippines in 2013. Carrying out these smaller yet no less essential missions is becoming harder if not impossible. General John Kelly, head of U.S. Southern Command, testified in February that the forces under his command have intercepted 40 percent less cocaine, heroin, and other drugs coming into the United States than in 2011 because of budget cuts. Yet no one in Congress is seriously suggesting that the U.S. armed forces get out of the drug-interdiction business—much less the business of keeping open sea lanes and safeguarding allies such as South Korea, Poland, and Saudi Arabia. What Congress seems to want is for the military to do everything it is doing now for 30 percent less. It can’t be done; something will have to give, and soon.

Even if the U.S. armed forces are somehow able to cobble enough resources together to continue their current commitments, they will be unprepared for future wars—which, if history is any guide, will come no matter how much we may want to avoid them. These include ground wars, which are currently anathema in the wake of Afghanistan and Iraq. But recall that no one wanted to fight another ground war after the Civil War, of after the Philippine Insurrection, World War I, World War II, the Korean War, or Vietnam—and yet ground wars came, most often in the form of low-level but hard-to-win counterinsurgency campaigns in unexpected places. As then-Defense Secretary Robert Gates told West Point cadets in 2011:

When it comes to predicting the nature and location of our next military engagements, since Vietnam, our record has been perfect. We have never once gotten it right, from the Mayaguez to Grenada, Panama, Somalia, the Balkans, Haiti, Kuwait, Iraq, and more—we had no idea a year before any of these missions that we would be so engaged.

The implication of his warning is clear: The United States needs to maintain a full spectrum of military capabilities that will enable forces to carry out missions ranging from fighting two major wars simultaneously to conducting multiple stabilization, deterrence, anti-piracy, counterterrorism, and

forward-presence operations. Unfortunately, the U.S. military lacks the capability to carry out all these missions today—and the imbalance between resources and assignments will become even more pronounced in the next decade. That can only be cause for cheer in Moscow and Beijing and Tehran—everywhere, in fact, in the world where autocrats believe their power will only rise as America’s strength declines.

About the Author

Max Boot, a regular contributor to Commentary, is a senior fellow in national-security policy at the Council on Foreign Relations and author of Invisible Armies: An Epic History of Guerrilla Warfare from Ancient Times to the Present.